Apple is reportedly working on new technology to deliver video to televisions.
According to the Wall Street Journal, Cupertino has also been in talks over some sort of subscription TV service - although this initiative seems to have failed thus far.
Although additional details are lacking, AppleInsider's Josh Ong points out that the reports could be linked to Apple's upcoming AirPlay Mirroring functionality, which is said to be one of iOS 5's most exciting feature.
"AirPlay Mirroring could bring about significant disruption in the console gaming market by allowing iOS game developers to offer console-style gaming with the iPhone or iPad serving as both the hardware and a wireless controller," wrote Ong.
Other speculate that Cupertino will debut an Internet-connected, Apple brand HDTV sometime in the near future, perhaps even as early as this fall.
A number of analysts, including Maynard Um of UBS Investment Research, believe Apple is in a prime position to clinch the battle for the "digital living room."
Similarly, Motley Fool's Eric Bleeker says Apple leveraging iOS in the lucrative entertainment space could be Tim Cook's next big step as the company's new CEO.
"The main visionary aspect was accomplished, which was creating the mobile platform that now powers Apple and bringing the developers on," Bleeker explained.
"Once you had iTunes and iOS, less innovation was always needed, in a way, because of the momentum once you start moving forward."